February 16, 2016

Building in New Site Success: Ground Decisions in Data-Driven Reality

When winter makes way for spring, it’s time to build. For fuel and convenience retailers, this is the season when big hopes turn into real plans and—when everything goes right—ground breaks on a new site build. It’s time to make your bet on a location, site layout and fuel brand. The tough reality? Every decision carries risk, and it may be years before you know whether your investment will pay out.

“Planning a new site build takes good gut instinct, and that means instinct that’s well informed with data-driven scenarios,” says Ian Thompson, Senior VP of Global Solutions Consultancy. “A site may look perfect today, but other businesspeople are out there making decisions, too. What pricing stance is going to work best? How many fueling positions does that location really need? The retailers we see succeed are those who ask ‘what if’ before they break ground.”

How can a fuel and convenience retailer explore those ‘what if’ scenarios cost-effectively? “That’s where Kalibrate Single Site Analysis comes in,” says Marianne Hillhouse, Sr. Account Executive. “It’s an exciting time for a retailer. Building something new brings out an optimism that’s the heart of American business. The downside? That same excitement can cloud your vision about real potential in a property.”

Hillhouse continues: “Big brands don’t want to cannibalize their own networks. Mid-sized brands that fly several different banners want to know which one will work best at a particular site. And small owner/operators might be betting their life savings. But whatever size the client, the stakes are always high. That’s why Kalibrate’s Single Site Analysis is so helpful. It’s unbiased due diligence that combines enthusiasm and data-driven analysis. You get volumetric forecasts you can take to the bank—and many of our clients do.”

Susan Ertl heads up the Single Site Analytics Team and delivers client results. She explains that one of the most complex situations is also a common one. “You want to open a location in a growth area. You know development is happening there—something that will bring a lot of people to the area, like new housing, extended retail, an industrial development, or a casino. You’re ahead of everyone else, so opening a location there seems like a no-brainer. It looks like an easy win. Of course, it’s not quite that simple.”

Ertl continues, “This is where Single Site scenarios can help. We would start with volume forecasts based on the existing trade area and include growth information for the development—what the client thinks the future holds. Of course, those numbers may be favorable. But what if a new major branded station opens up across the street? What if the new development changes a traffic pattern that limits the number of cars passing the site? Choices related to other retail elements, like fuel brand, site layout, number of fueling positions and pricing stance, could make or break your ability to survive the change. That’s what a Kalibrate Single Site Analysis can reveal.”

Kalibrate also enables Single Site clients to run additional scenarios for up to 12 months for a small fee. “Situations change,” says Hillhouse. “For example, you may find out that a city ordinance may not allow your site as many curb cuts as you had initially anticipated. Or, there’s word that a Sam’s Club is on schedule to open a few miles away that will compete for some of the same customers that you anticipate coming to your site. How will those changes impact your new build site’s volume potential? Once you know and understand what’s driving volume potential at a particular location, you can do something about it. And that’s Kalibrate’s goal—to provide volumetric projections that depict reality, to give you insights you can use to make better business decisions and achieve the new site success you desire.”